- Associated Press - Tuesday, March 3, 2015

MONTGOMERY, Ala. (AP) - Alabama lawmakers began the 2015 legislative session Tuesday with a gloomy budget outlook and a push by Gov. Robert Bentley to raise taxes by $541 million to fill the fiscal hole.

An anticipated shortfall in the state General Fund is expected to be the toughest problem facing lawmakers as they gather in Montgomery.

Acting Finance Director Bill Newton told lawmakers in a Tuesday budget presentation that Alabama, even if legislators approve Bentley’s tax plan, will still have among the lowest taxes in the nation. Newton said the state now ranks 50th in combined state and local tax revenue per capita. Alabama will rank 48th if lawmakers approve Bentley’s tax plan, he said.

“I think we all need to put this in perspective as we move forward in trying to address our General Fund challenge,” Newton said.

Norris Green, director of the Legislative Fiscal Office, told lawmakers Tuesday morning that the General Fund is projected to have $290 million less in the next fiscal year, a decrease of about 15 percent.

However, Bentley is estimating that the budget need is actually much higher because of millions owed to the federal government for Medicaid overpayments, money owed to the General Fund rainy day fund that must be repaid by 2020 and funds taken from education and transportation programs to prop up other government functions.

Newton said the state has pressing needs in mental health services and prisons.

The governor on Friday proposed a $541 million tax increase- with $405 million coming from increases in taxes on tobacco products and automobile sales. He also proposes close some corporate tax loopholes.

Sen. Arthur Orr, the chairman of the Senate General Fund budget committee, said it is too soon to predict how lawmakers will react to Bentley’s revenue-raising proposals.

“It’s too early to tell. We don’t have a clear read of what the general mood of the body is,” Orr said.

Orr said lawmakers will have to decide whether they want to tackle the minimum shortfall or address the larger problem.

At a tea party rally on the Alabama Statehouse steps, Betty Harlan held up a sign opposing the governor’s tax increase. Harlan said she voted for Bentley expecting that he would be against taxes.

“He comes around after four years and immediately does new taxes,” Harlan said

Charter schools and a prison reform bill will also be two key issues before lawmakers this session.

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